Ratings Roundup: Tailwind/Northwind – Unum Group, GMAC

A.M. Best Co. has revised the rating outlook to negative from stable for the debt rating of “aaa” on $130 million of Series A floating rate senior secured notes, due 2036 (notes) issued by Tailwind Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Unum Group. “Tailwind Holdings was formed for the limited purpose of holding the stock of Tailwind Re, Inc. issuing the notes and engaging in other activities incidental to the performance of its duties,” Best explained that its decision to revise the outlook was based on “the development of the policy cash flow projections and the risk factors and assumptions used in the deal model,” including the timely payment guarantee of MBIA Insurance Corporation. Best also revised the rating outlook to negative from stable for the debt rating of “aaa” on $800 million of floating rate senior secured notes, due December 1, 2037 issued by Northwind Holdings, LLC, another Delaware limited liability company and a Unum Group subsidiary. It was “formed for the limited purpose of holding the stock of Northwind Reinsurance Company, issuing the notes and engaging in other activities incidental to the performance of its duties. As with Tailwind, Best indicated that the “revised outlook is due to A.M. Best’s concerns regarding the financial and operational pressures currently being experienced by MBIA and the change in its short-term credit profile

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Michigan-based GMAC Insurance Group (GMACI) and its members. However, Best has revised its outlook on the ratings to negative from stable. Best said the revised outlook reflects its “concerns regarding the financial pressures being experienced by GMACI’ s ultimate parent, GMAC LLC (GMAC), and the potential financial and operational impacts on GMACI. The challenges at GMAC are driven by the continuing risks associated with its mortgage lending subsidiary, Residential Capital, LLC (ResCap) (Minnesota) in the volatile housing and mortgage sector, which has weakened GMAC’ s capitalization, liquidity and profitability. The negative outlook indicates that further material deterioration in GMAC’ s credit position may likely result in a downgrade of GMACI’ s FSR and ICRs.”